Amazon reported strong results in the first quarter of 2024, with revenue of $143.31 billion, a 13% increase compared to the same period last year. Net profit reached $10.43 billion, or $0.98 per share, significantly surpassing Wall Street analysts’ expectations of $0.84 per share.
“It was a good start to the year across all business segments, as seen in both improvements in customer experience and financial results,” said Amazon CEO Andy Jassy in a statement.
The Seattle-based e-commerce giant had previously exceeded expectations during the holiday shopping season, when consumer spending was strong, aided by discounts and faster delivery times. The company held another promotional event in late March, just before the end of the first quarter.
According to Brian Olsavsky, Amazon’s CFO, U.S. customers are being “very cautious” with their spending, seeking promotions and opting for more affordable products. He noted that the company is seeing, “particularly,” a reduction in spending in Europe.
AWS Accelerates
The company’s cloud computing division, Amazon Web Services (AWS), recorded sales of $25.04 billion in the first quarter, a 17% growth compared to the same period last year. AWS, whose clients are primarily businesses, has been the cornerstone of Amazon’s strategy in the competitive AI race among major tech companies.
Jassy stated that AI capabilities have reaccelerated AWS’s growth rate, which is now on track to reach $100 billion in annual revenue. Hours before the earnings release, Amazon announced the full launch of a business chatbot called Q, designed to help employees be more productive at work.
Advertising on the Rise, Including Prime Video
Sales in the company’s online advertising business surged by 24%, driven mainly by sponsored product ads. Olsavsky highlighted that Amazon, which began showing ads on Prime Video in late January, currently has a “light” number of ads on the streaming service compared to TV or other providers.
“Ads are performing well and attracting several new advertisers who weren’t using Amazon’s advertising services,” said the CFO, referring to the Prime Video initiative, which allows customers to avoid ads for an additional monthly fee of $2.99.
Amazon shares rose about 2% in after-hours trading, reflecting investor confidence in the reported results.
For the second quarter, Amazon expects to report net sales between $144 billion and $149 billion, while analysts estimate $150.2 billion.
